Ameresco (AMRC) to Acquire Enerqos for Expansion in Europe
Ameresco, Inc. AMRC recently inked an agreement to acquire Enerqos Energy Solutions, an Italy-based renewable energy and energy efficiency company. The acquisition is expected to reach fruition in March 2023.
Through a definitive purchase and sale agreement to acquire the company, Ameresco aims to expand its footprint in Europe and boost its renewable energy portfolio.
Rationale Behind the Acquisition
Enerqos has a vast experience in the energy efficiency and renewable energy solution arena. It boasts a strong diverse portfolio of cost-saving and carbon-reduction projects, which is spread across several segments of the market in Italy. Such expertise and the scalability of operations of Enerqos are sure to provide a competitive edge to AMRC, enabling the company to expand its presence in Europe’s clean energy market.
Ameresco already enjoys a strong footing in Europe, with clean energy business operations in the United Kingdom, Ireland and Greece. With Italy being the new addition, the company is likely to build on its high-growth clean energy solution business significantly in Europe.
The European region exhibits significant opportunities for expansion for companies in the alternative energy space as the region transitions to renewable energy sources to curtail the carbon footprint in the environment. Per the report from Mordor Intelligence, the renewable energy market in Europe is likely to expand at a CAGR of more than 7% over the 2022-2027 period.
Such widening market growth prospects undoubtedly promise immense returns on investments by companies in the energy service area. In such a scenario, the strategic acquisition of a complementary business broadens AMRC’s service, offering scope in the region and expanding its geographical reach. This is likely to bolster the revenue generation prospects of the company in the days ahead.
Peer Moves
Companies make acquisitions for growth and to widen the scope of their business by entering into new markets, expanding their product portfolio and enhancing their geographical footprint. In this context, other than AMRC, companies that have made acquisitions to attain strategic growth in the renewable energy space are as follows:
In June 2022, Clearway Energy CWEN announced that it has entered into a binding agreement to acquire a portfolio of operating wind projects from Capistrano Wind Partners for a cash consideration of $255 million.
The long-term earnings growth rate of CWEN is pegged at 10%. The Zacks Consensus Estimate for Clearway Energy’s 2023 sales suggests a growth rate of 12.8% from the prior-year reported figure.
In December 2022, Altus Power AMPS announced that it entered a definitive agreement to acquire approximately 220 megawatts of newly developed and in-construction solar assets for approximately $293 million from funds managed by True Green Capital Management LLC.
The Zacks Consensus Estimate for Altus Power’s 2022 sales suggests a growth rate of 42.7% from the prior-year reported figure.
In September 2022, Brookfield Renewable Corporation BEPC agreed to acquire Scout Clean Energy for $1 billion with the potential to invest an additional $350 million to support the business’ development activities ($270 million in total net to BEP).
The Zacks Consensus Estimate for Brookfield’s 2023 sales suggests a growth rate of 11.9% from the prior-year reported figure. The Zacks Consensus Estimate for 2023 earnings indicates a growth rate of 55% from the prior-year reported figure.
Price Movement
In the past year, shares of Ameresco have decreased 25.1% compared with the industry’s decline of 7.9%.
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Zacks Rank
Ameresco currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Ameresco, Inc. (AMRC) : Free Stock Analysis Report
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